Best Real Estate Question of the Year: Is The Rent Too Damn High?

by UrbanTurf Staff

UrbanTurf is taking a week-long look back at the best that DC’s residential real estate market had to offer in 2010. From the best deals to the best renovations to, of course, the best listings, we believe we have sussed out the cream of the crop.

The video that became an internet sensation in October was that of Jimmy McMillan’s Rent is Too Damn High performance at the New York governor’s debate, which essentially stole the stage from big-name candidates like Andrew Cuomo.

Earlier in October, research firm Delta Associates released its third quarter report in which it noted that rents in the DC area had soared 7.3 percent for Class A and B apartments over the past 12 months. Specifically, the average rent in the DC area had risen to $1,643 a month, up from $1,507 a month in September 2009. By the conventional wisdom that you should spend no more than 35 percent of gross income on rent, DC area residents would have to make at least $56,300 a year to comfortably pay the current monthly rent.

In an effort to find out if DC residents were indeed paying too much in rent, we asked UrbanTurf readers if they were paying above or below the 35 percent threshold. Here are some of their responses:

* I make about $65,000 a year and pay $1,800 a month in rent, so come in right under the 35% threshold. I also think I got a good deal on my 1-bed place considering what friends pay, so others in my income situation are probably paying more.

* Looking at my paystubs for the job I started at the end of April, 33% of my (pre-tax) income in that period has gone to rent. That’s 43% of my after-tax income. I’m in Arlington, paying about $100 less per month than I did in DC. I’m also sharing a 1-bedroom apartment with a flatmate.

* I just did the calculations and was shocked to discover that I only pay 19% of my gross pay in rent even though I live in a Class A 1 BR apt in Downtown Silver Spring. However, that translates into 34.4% of my net pay (which is a fairer comparison – why does anyone factor in gross pay when that cash isn’t readily available?). It certainly feels like rent takes up a lot of my pay.

While none of these renters paid above the 35 percent threshold, it should be noted that just this morning, The Washington Post reported that rents in the DC area have risen to their highest levels in 20 years. Just-released Census figures show that 2009 rents in the area had surged 22 percent from a decade earlier.

Previous Best Of 2010 entries:

See other articles related to: best of 2010

This article originally published at https://dc.urbanturf.com/articles/blog/best_real_estate_question_of_the_year_is_the_rent_too_damn_high/2784

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